Product life cycle patterns for pharmaceuticals and their impact on R&D profitability of late mover products

✍ Scribed by Hans H. Bauer; Marc Fischer

• Publisher: Elsevier Science
• Year: 2000
• Tongue: English
• Weight: 171 KB
• Volume: 9
• Category: Article
• ISSN: 0969-5931
• DOI: 10.1016/s0969-5931(00)00028-7

✦ Synopsis

This study describes a cross-sectional and time series analysis of sales data over one decade in four major segments of the market for cardiovascular drugs. We estimate over 200 product life cycles (PLC) using a very flexible mathematical model to account for a variety of PLC shapes. Life cycles are then clustered on the basis of estimated regression coefficients. As a result this analysis leads to the detection of an international PLC classification. Moreover, it turns out that the order of entry is not only crucial to achieve a certain market share level but also to the shape of the drug life cycle and therefore for the long-term economic evaluation of innovative products. The paper provides the initial findings on this subject through a simulation study which is in line with previous research designs and shows the impact of the PLC shape on the net present value (NPV).